Disputes Involving Claims for Reimbursement of Expenses Incurred for the Deceased or his Estate

23 July 2021

Foo Soon Yien

​It is often believed that leaving a will is more about protecting one’s family than it is about your death. As such, many individuals leave wills in order to gain peace of mind that his/her family would be well taken care of and would remain harmonious in the future.

Yet, sometimes, the old saying that ‘friendship and money is like oil and water’ applies to family and money as well. Consider the following situation: before your parents passed away, you agreed to loan your parents some money for their home renovation works. You were promised that this loan shall be recovered from the sale of their home upon their deaths. However, this promise was not stipulated in your parents’ wills and the executor refuses to reimburse the expenses you incurred for your parents’ home renovation works. So, what should you do if you find yourself in this situation?
 
Family Arrangements
 
First and foremost, you should always try to settle this dispute amicably. If parties are agreeable to a settlement, parties may enter into a Deed of Family Arrangement which would encapsulate the terms of the settlement. The Deed of Family Arrangement is an agreement between members of the same family which intend to confer some benefit upon the family. This type of arrangement has been recognized by the highest court in Singapore as legitimate agreements to compromise doubtful or disputed rights so as to preserve peace and harmony within the family, which would be disrupted if the matter were to be litigated in court instead. 
 
The Singapore courts also further recognize another category of agreements which are generally treated as family arrangements. These are agreements entered into between surviving descendants of a deceased person to give effect to testamentary wishes which the deceased expressed before his/her death in a manner that was not and could not take effect as a will. 
 
Turning to the legal consequences of family arrangements which are reduced into writing, the Singapore courts have clarified that such agreements would not be interpreted by the courts with an excessive degree of formalism. Instead, the courts would seek to ascertain the parties’ intentions and, so far as possible, endeavour to give effect to them. As long as the agreement was fairly and freely entered into without any concealment or unfair pressure, the court will uphold the agreement even if the parties may have misunderstood the true state of their legal rights prior to entering into the agreement.
 
The Law
 
However, if you are unable to reach a settlement, the law provides for the settlement of lawful debts of the deceased. According to the law, the executors and trustees of an estate owe fiduciary duties as personal representatives to settle the lawful debts of the deceased. Furthermore, s 67(1) of the Probate and Administration Act also states that the courts have the power to determine and allow reasonable expenses incurred by executors or administrators. 
 
In a precedent case (“Case A”) involving a dispute amongst siblings who were the administrators and beneficiaries of the estate of their late father, the plaintiffs and the defendant disagreed in respect of which expenses incurred by them were claimable from the estate. The plaintiffs, as trustees of the estate, relied on s 67 of the Probate and Administration Act and s 41S(1)(a) of the Trustees Act.
 
With reference to s 41S(1)(a) of the Trustees Act, the court held that the operative words “reasonable expenses properly incurred” in relation to a trustee being reimbursed expenses incurred on behalf of a trust placed the burden on the defendant to prove that (a) the expenses incurred were testamentary in nature and/or incurred on behalf of the deceased and (b) they were reasonably incurred.
 
Ultimately, the court held that the defendant in Case A had failed to discharge the burden of proof necessary because her actions were clearly not motivated by filial piety for her late father, but by pure greed. Hence, she was not entitled to be paid reasonable testamentary and other expenses that she had incurred on behalf of the deceased.
 
In another precedent case (“Case B”), the dispute involved the ability of children to claim against their parent's estate for reimbursement of medical expenses. The court held that it was possible for children to make claims against their parents’ estate for the reimbursement of the latter’s medical expenses as there are no existing regulations against any private arrangements reached between family members for parents to reimburse their children. This is despite the Singapore government’s emphasis on children caring for their aged parents as there is also a need to ensure that the burden put on children with regard to the payment of their parents’ medical expenses is not unduly heavy.
 
Conclusion
 
In sum, should you find yourself in a dispute with your family members due to claims for reimbursement of expenses incurred on behalf of the deceased/his estate, you may either: (a) negotiate for a settlement and enter into a family arrangement; or (b) rely on the law to assert your legal rights.
 
However, in the interest of preserving peace and harmony within the family, it is highly recommended that you first try to reach a settlement and enter into a Deed of Family Arrangement. This would also be the most efficient and cost-effective route to settling your dispute. 

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Foo Soon Yien
Senior Director, BR Law Corporation
foosoonyien@brlawcorp.com​